Nearly half of parents with adult children still pay their bills

Nearly half of American parents with adult children continue to support them financially — to the tune of $1,442 a month on average, according to a new survey. 

Parents who pay bills for an adult child are most likely to cover relatively modest expenses such as groceries and cellphone plans, according to a poll by Savings.com, the personal finance site. Yet, more than half help pay a child’s mortgage or rent, a monthly expense that averages more than $800.  

The survey, taken in February, found that 45 percent of parents with adult children provide financial support to at least one grown offspring.  

Most of the children receiving parental aid fell between the ages of 18 and 24, years that coincide with college and the transition to full-time work. But more than one-third were 25 or older, and 1 in 10 was 35 or older.  

This is the second year of the survey launched during the COVID-19 pandemic. The 2022 and 2023 surveys reached similar conclusions, although parents seem to be spending more on adult offspring now than a year ago. Each survey reached roughly 1,000 parents with adult children. 

“There’s just a lot of pressure on younger adults, and they might still be reaching out to their parents for support,” said Corie Wagner, senior editor of industry research at Savings.com. 

Inflation, lagging wages, rising interest rates, surging housing costs and student loan debt all have hobbled young adults in recent years.  

“The situation for young adults today is much more bleak than for some previous generations,” said Christine Percheski, a sociologist at Northwestern University. “We are not covering as much of the cost for college as we did for previous generations. And young adults are facing a tough housing market that is not of their making.” 

The COVID-19 pandemic drove millions of adult children back to the parental nest. The pandemic’s early months found a majority of young adults living with their parents for the first time since the Great Depression. 

More than half of U.S. children in the 18-24 age range now live with their parents, but it’s less common for older adult children to live in their childhood homes. As of last year, 19 percent of men and 12 percent of women in the 25-34 demographic cohabited with their parents.  

In the new survey, most adult children who received financial help from parents lived in the parental home. Fewer than half of them helped with household expenses.  

For many parents, supporting a child into adulthood is the essence of parenting. Adults in their 20s may be dealing with entry-level wages, unpredictable housing costs and lingering student debt. 

“In many cases, you’re helping set your young adults up for a more successful adulthood,” Percheski said. 

But parents who cover rents and car payments for adult children risk short-changing their own retirement plans. Among the surveyed parents who support adult children, three-quarters reported stress about their ability to live comfortably in retirement. 

On average, working parents in the survey reported saving $635 in monthly retirement contributions, far less than they spent on their adult children. 

“The question really should be, Are you putting enough away for retirement or not?” said Jim Kinney, a certified financial planner in New Jersey.  

“If you’ve got a retirement plan, and you’re golden, and you want to help your kids buy a first house, then good, and God bless.”  

Parents who have not budgeted for their retirement should make that a priority, Kinney said. 

“You have to kind of take care of yourself. Your kids have years and years to get their financial footing.” 

While the pandemic brought a surge in multigenerational households, the idea of parents and grown children living together is not new. In the first decades of the 1900s, more than two-fifths of adults under 30 lived with their parents, often on family farms, according to Pew Research data.  

“This idea of young people living alone, or with a roommate, is pretty historically new,” Percheski said. 

The Savings.com survey echoes the findings of several other polls that have gauged the evolving financial relationship between young adults and their parents.  

In one recent survey, two-fifths of millennials reported that their parents still pay one or more of their monthly bills. Roughly one-quarter of millennials said parents cover their monthly housing costs. 

A survey by Credit Karma, another personal finance company, found a somewhat smaller share of parents, 31 percent, supporting adult children financially, either by allowing them to live in the parental home or by paying some or all of their bills.   

The Savings.com survey shows parents helping grown children with a host of expenses, from health insurance and student loans to credit-card payments and “discretionary spending” — the adult version of an allowance. 

The key question, Percheski said, is whether the parent’s largesse is shepherding the adult child toward an independent and prosperous adulthood. 

“Is the economic support that you’re providing your child helping position them for a better future?” she said. “Or is it enabling them to delay taking on adult responsibility?”